Sun-Connect News had a chance to interview Co-Founder Thibault Lesueur:

SC News: Do you remember the first customer your company has served?

Thibault: Yes I remember him perfectly as I installed him myself in December 2014! His name is Masunga Mdongo, a father of 2 kids who was running a small grocery shop in the district of Misungwi (Mwanza region, Tanzania) and wanted to increase his revenue opportunities by adding a small “phone charging” activity to his daily sales of sugar, oil and soap. Back then we were starting our pilot and were focusing exclusively on micro-entrepreneurs with a small Solaris system enabling them to charge 5-6 phones a day. So Masunga subscribed to a 20W system with phone charging cables and 2 lights. Since then a lot changed, the pilot became a proper last mile distribution company (called Solaris Tanzania), we opened our offers to householders who represent more than 90% of our customer base now, and following the desires of Masunga and many more after him, we turn the Solaris system into a modular product that allows them to upgrade the power according to their business requirements, managing up to 200W of solar peak power.

SC News: What is your experience: which other appliances for Solar-Home-Systems - beyond lighting - you think should be provided in future?

Thibault: At Solaris Offgrid, we deal with field partners that desire to replicate what we are currently accomplishing with Solaris Tanzania, or to plug such SHS dimension to their current offers such as cookstove/lamps distribution or mini-grid operations. Such partners have all shared the need to have hardware already connected to software (to save time and involve less intermediaries) and to benefit from our Tanzanian learning curve. Such enquiries pushed us to design an integrated solution that includes:

Hardware - a modular charging controller with plug and play lights and switches (it is then up to our partners to source the panels and batteries according to the offers they desire to implement for their operations). We also share our upstream contacts for further products and accessories such as radios, TVs, hair-clippers, etc.

Software - a platform and an application, co-designed and inspired by last-mile operations' decision makers, in order to enhance the field performance.

Empowerment – we offer all partners a training session in Tanzania where they can use all our practices as a benchmark that they can adapt later on and customize to their own environment.

Finance push: we then realized these potential partners could sometimes experience capital requirement issues while scaling their operations. Therefore we now provide them with links to funding opportunities to help them to deal with the capital intensity of any PAYG centred business model better.

In Tanzania, ultimate customers from remote areas are currently offered several options from 20 to 80W (soon up to 200W of solar power). Despite a common burning desire from everyone to get a TV at home (that we offer from 80W), few can afford it yet. Thus, the most modest customers are using 20 and 40W systems that include a radio until they can eventually upgrade to an 80W system with the desired TV… As for the future, we are finishing a study about food storage, farming, educational needs related to energy and how (e.g. with what kinds of accessories through a modular SHS like the Solaris one) we could go beyond lighting and TV to facilitate the life of people who can’t rely to abundant sources of electricity. Extracts of this study will be shared on our website www.solarisoffgrid.com soon, come visit!

SC News: What would you recommend young entrepreneurs in Asia/Africa in the off-grid solar sector when they start to work: what is the most important skill or talent they need?

Thibault: As I mentioned previously, when we started our pilot we were exclusively aiming at micro-entrepreneurs with the intention to provide them with a non-modular 20W product, thinking such a size was addressing everything they needed to commercialise energy in their communities. It turned out our plan was not fully accurate and we had no other choice than to “pivot” and change our game plan radically and to do it fast and cheap. From there, we also realized running game changing operations in a remote environment such as the Tanzania bush involved a lot of uncertainty we had to accept and integrate with to expand better. All of those challenges taught us we had to be in love with the problem we were trying to fix (energy access) rather than the solution (a given system with a specific game plan) to go the distance. Fluidity and resilience is the key skill, in my opinion, for anyone willing to get into such a young and exciting industry where most standards are yet to be defined.

SC News: When companies grow, the need for good and reliable staff is big. How do you find your staff?

Thibault: So far we have developed two approaches for two kinds of profiles:

For our HR needs in Europe (Solaris Offgrid’s HQ) or for top managers to be involved in our Tanzanian branch (Solaris Tanzania) we are creating connections with the best universities in Europe where publish and pitch about what we do and who we are and trust that our model and its reason of existence attracts incredible individuals. We haven’t been disappointed so far.

For our HR needs in our Tanzanian branch concerning middle management and field staff, we use the network of our current employees (who are encouraged to recommend reliable, skilled people) and some public recruitment websites where we find very interesting potential too.

SC News: The market in developing countries is often influenced by local corruption, insecure governmental policies, bureaucratic hurdles for customs clearance. Which obstacle is/was for your business the most challenging one - and why?

Thibault: That is a very good (and pretty polemic) question. Of course, we have experienced some issues in Tanzania like every company I know that tries to establish a proper business there. Administrative tasks of any kind can be very time consuming due to the inertia of the Tanzanian system indeed. Although, I believe the most complex issue right now could be the ones related to permits, visas and working authorisations, mostly due to the lack of consistence of the authorities. Such difficulty is affecting the whole market we belong to and its players as it makes our life harder to bring the appropriate skillset and required knowledge to expand properly and create even more local jobs and wealth in the remote areas that need it most…

SC News: Right now we see a huge focus on pay-as-you-go sale in the off-grid sector. How do you see the further development of this type of business?

Thibault: We all know there is approximately 1.2 billion people who struggle to access to energy on earth. We witness most of those 1.2 billion people are also the ones belonging to the BoP (Base Of the Pyramid) and thus can’t afford to pay for more than a solar lamp upfront. As a result, I honestly don’t see how we can bring decent access to electricity to millions of people as fast as it is required, without breaking down such cost through a PAYG approach. Furthermore, in the PAYG segment, I believe the "rent-to-own” is the most sustainable approach as it guarantees a greater commitment from the customer (who is incentivised by the transfer of ownership) rather than the “energy-as-service” approach where the customer will pay forever for accessing a product he is less inclined to take care of. Thus, the latest pivot of Offgrid Electric, that moved from “energy as a service” to a “rent to own” approach (as we have observed in Tanzania), is the right way to go in my opinion.

SC News: The off-grid sector worldwide is depending on soft loans and donations. Do you think this soft money is helpful to build the industry?

Thibault: I believe such financial support is relevant at a very early stage, when, as an organisation, you need to develop a proof of concept for which the main purpose is to demonstrate technical viability rather than economic balance. Further down the line, I believe overflow of soft loans and dotation could disturb the creation of a sustainable industry. On the other hand, much of the rates offered to companies with such a risk profile, due to the countries and customers dealt with, are far from being soft and not always optimal to expand as fast as possible. Although, frugality can also be seen as the mother of creativity: we decided to embrace such limited financing capacity from day one, that as a business, Solaris Offgrid developed according to lean start-up patterns to come up with a game changing model that is on the right path to provide millions with real access to electricity.

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The company in brief:

Name of the company:

Founded:

Headquarters based in:

Solaris Offgrid

2014

Valencia, Spain

Business activity:Solar lanterns / Pico SHS (Plug&Play); Installed SHS with applications; Special systems: water pump, health stations, street lights etc.; Wholesaler; Assembling / Manufacturing; End user finance (PAYG).Solaris Offgrid has also developed a last mile distribution branch called Solaris Tanzania that conducts last mile field activities in northern Tanzania. The branch provides Solaris Offgrid with a unique positioning and understanding of what are the main challenges a field partner is facing in order to design the best solution and on-going updates. In 2016, Solaris Tanzania brought electricity to more than 5,500 people and aims at tripling this rate in 2017.